Increasing Rebuilding Cost on your Home

If you are like most homeowners, your home is insured for the amount of money you paid for it. Why? Because, that is what your lender demanded in order to grant you a mortgage.

But, if your home is paid off, it is likely that your homeowners insurance does not provide enough coverage to rebuild it. No matter what you paid for it, or what the price of real estate is following the housing crash, the cost to rebuild your home is more expensive than you think..

Unlike new construction, replacing your home on the site it stood upon requires demolition work and the removal of debris. These are costs not normally associated with new home construction.

To find out how much coverage you need to rebuild your home you first need to establish your insurance policy’s dwelling limit. The number you want is the full-replacement cost of your home and your belongings. This has no relationship to market value or appraisal value or even assessed value for tax purposes. It is the cost of demolishing your old home, removing the debris, and the cost of labor and materials to rebuild your home. The average cost of home construction is around $250 per square foot. However, costs can quickly soar to $400 per square foot if your home is a historic property, has unique architecture, or is in a remote location or high-end community.

Your insurance agent has the tools needed to determine your dwelling limit and is able to answer any questions you have about your homeowner’s policy. Contact Aggetta Insurance in Pleasant Hill, California for all your insurance needs.